Erdogan's victory assures Turkey's economic future
Sunday’s elections in Turkey saw Recep Tayyip Erdogan sweep to power, gaining 52.6 percent of the vote, which gave him an outright victory.
Despite Muharrem Ince’s last-minute rallying, the opposition candidate gained just 30.6 percent of the vote, defying opinion polls which had predicted a presidential run-off.
Erdogan’s AKP party received 42.5 percent of the party vote, falling short of the parliamentary majority of 301, a drop of 7 percent since November 2015. AKP’s ally the MHP (Nationalist Party) received 11 percent of votes, which translated to 49 seats in parliament, allowing a coalition with AKP to reach the majority.
Erdogan’s to-do list
The new parliamentary make up is slightly less favourable to the ruling party, and could well pave the way for AKP’s greater co-operation with other parties. Meanwhile, the new presidential system, which will see the role expand to enjoy far greater powers than before, gives Erdogan scope to implement far-reaching policies.
Commentators believe one of Erdogan’s first tasks will be to address the emergency rule, which has been in place since the attempted coup in July 2016.
His approach to the economy will also be under scrutiny. Bringing down inflation and unemployment rates, as well as bolstering the lira and improving the current account deficit, will be of utmost concern to the leader, who has continued to be elected on the strength of his past economic successes.
He’ll also need to address the long-running situation with neighbouring Syria, and improve relations with the European Union, Turkey’s largest economic partner and source of foreign direct investment. Relations with Europe have deteriorated in recent years, and many are hoping the re-elected president will soften his anti-Europe stance and work towards a new era of co-operation.
Turkey’s economic past and future
Despite concerns about inflation rates and the depressed lira, Turkey’s growth rate has remained steady. Last year, the economy expanded by 7.4 percent, well above expectations, putting Turkey, home to a strong manufacturing and construction industry, second among G20 countries and first in the OECD. First quarter growth this year matched 2017’s annual growth rate.
Meanwhile, Turkey’s industrial and construction sectors continue to drive the country’s economy. Istanbul’s new airport, due to open towards the end of the year, will employ 100,000 people, eventually serving 200 million passengers each year, a significant feather in the country’s cap this year and for the future.
Turkey’s economic fortunes have drastically increased over the past ten years, weathering economic storms that buffeted the globe, and turning the country into the world’s 13th largest economy, and the fifth largest in Europe. The consistent economic performance under Erdogan’s rule has encouraged foreign direct investment as investors’ confidence about the president and the country’s future performance.
Property investment under more Erdogan rule
Property Turkey director Cameron Deggin says the election results will herald an “influx of property investment”.
“From what we’re seeing, investors have been sitting tight, waiting to see whether Turkey was in for a change in leadership and perhaps a less certain economic future,” he says. “Now the election's over and the future looks clearer, property investors will be returning to the market.”
Deggin says Erdogan, despite his diminished majority, has a track record of results.
“However you feel about Erdogan, under his direction the economy has grown remarkably, and the ideas and initiatives he’s spearheaded have created an extremely favourable investment climate that has seen Turkey’s investment property sector grow considerably.”
Deggin expects Istanbul to continue to lead the country in property investment, with prices continuing to climb along with economic growth and attracting more people hoping to invest in Turkey. Growth in the southern coastal regions will also continue as interest in apartments and villas in Turkey's resort towns continues to grow, but at a more modest pace than Turkey's largest capital, he predicts.